15 Aug 2020 #Bitcoin
Warren Buffett’s Berkshire Hathaway sold bank stocks to buy a gold mining company, which will indirectly boost the price of Bitcoin, investors say. Berkshire Hathaway, the $503 billion conglomerate led by Warren Buffett, sold Goldman Sachs for a Canadian gold company Barrick Gold. Max Keiser, the founder of Heisenberg Capital and an early Bitcoin investor, says it could help buoy BTC to $50,000.
The quarterly shareholder filing of Berkshire Hathaway shows Buffett trimmed his position on most major banks, Fortune reported on Aug. 15. The firm sold a substantially large portion of its shares in JPMorgan Chase, Wells Fargo and PNG.
Buffett’s decision to completely close Berkshire’s position on Goldman Sachs follows the bank’s second-ever highest quarterly trading revenue of $13.3 billion. It suggests Buffett is not comfortable in betting big on the banking industry in the long-term.
Instead, Buffett purchased a single stock in Barrick Gold, whose stock has reflected that of gold in most of 2020. The firm is a gold mining company based in Canada, which recorded a 45% increase year-to-date. Following Berkshire’s investment, the stock rose by 8.11% in after-hours trading.
Max Keiser, an avid Bitcoin investor who has invested in companies like Kraken and Bitfinex, believes Buffett’s gold investment could benefit Bitcoin. He said the positive sentiment around gold implies a higher valuation for Bitcoin, which some consider as “digital gold.” Keiser said:
“Global $100 trillion fund management biz is less than 1% invested in Gold. With Buffett now moving into Gold. Expect global allocation of 5% AU min. Implies $5,000 Gold. Expect a 1% BTC global allocation ($1 trillion). This implies $50,000 for Bitcoin Expect PTJ ups to 10%.”
A former L/S equities portfolio manager and Ikigai Fund founder Travis Kling echoed a similar sentiment. Referring to Buffett’s skeptical statement in 1998 around gold saying it doesn’t have utility, Kling said:
“Today it was announced Berkshire Hathaway just bought its first gold stock ever. The reasons are self-apparent at this point. Just in case you’re wondering what the coming years are going to look like for Bitcoin, this was Buffett on gold in 1998.”
BTC has shown some correlation with the precious metal as of late
Although Bitcoin has outperformed gold since April, the price trend between gold and BTC has shown some correlation. Data from Skew show the two assets have increased in tandem throughout the past four months.
The simultaneous rally of Bitcoin and gold since the global market crash in late March hints that more investors are starting to consider BTC as a store of value.
Most recently, MicroStrategy, a $1.4 billion intelligence conglomerate, purchased $250 million worth of Bitcoin. The firm said BTC would act as the company’s primary treasury asset, acknowledging Bitcoin as a store of value and a potential safe-haven asset.
Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.
© 2015-2021 Crypto-Rating.com
The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.